FP II 4.02/4.03 Test

Which statement regarding the merger of multiple financial firms is true?

• More consumer loans were available from the smaller, individual firms than from the new larger firm.

• A merger usually makes it easier to determine which supervisory agency should oversee the new, larger company.

• The merger typically results in a smaller variety of products and services, lower costs, and reduced consumer risks.

• more consumer loans may be available from the new larger firm than were available form the smaller, individual firms.

A primary factor that has led to the consolidation of financial firms is the desire:

• to lower risks

• to lower costs

• for fewer assets.

• for fewer products

Which factor hinders financial convergence and consolidation?

• desire for illiquid assets

• technological advances

• financial deregulation

• desire for lower costs

Convergence and consoldiation in the finance industry have resulted in a

• highly compartmentalized finance industry

• one stop shopping environment for consumers

• single supervisory agency to regulate the finance industry

• more accurate picture of financial firms financial condition

An important aspect of investiment banking involves

• setting interest rates for financial institutions

• establishing the credit ratings of consumers

• valuing stocks for initial public offerings

• selling government bonds to individuals

Brain drain occurs when

• A country loses talented employees to better opportunities in other countries

• people who speak different languages try to communicate with one another

• consumers spen too much time shopping online

• businesses outsource jobs to other countries

Globalization can be a disadvantage for domestic workers when they lose their jobs because of the practice of

• environmental degrdation

• nationalism

• exporting

• offshoring

How has globalization affected consumers?

• It has made them more closed-minded toward other cultures and ethnicities

• It has given them a greater and better variety of products to choose from.

• It has increase competition among them

• It has helped htem to save on taxes

One of the biggest barriers that separtates countries/regions is

• methods of travel

• brain drain

• technology

• language

Companies tht operate at the international level should be aware of political factors that affect trade, such as civil unrest or

• business cycles

• currency rates

• competitiors

• embargoes